BofA Sees Limited Impact from Novartis’ Pelacarsen Trial Failure, Citi Eyes Ionis
Novartis AG's (NYSE:NVS) experimental drug pelacarsen failed to show a statistically significant reduction in cardiovascular events despite lowering lipoprotein(a), or Lp(a). The Phase 3 trial results were disappointing but Bank of America believes the setback has limited financial impact on Novartis' overall investment thesis. BofA estimates only low-single-digit percentage downside and maintains its Buy rating with an $185 price target, citing a broad pipeline across immunology and neuroscience. The firm highlighted four other Phase 3 readouts expected in late 2026 that could restore momentum for Novartis' growth outlook. The company's extensive development portfolio includes over 39 ongoing Phase 3 projects and three registration programs as of Q2 2026, which helps mitigate the impact of a single failed trial. Meanwhile, second-quarter sales reached $14.41 billion with modest revenue growth reaffirmed for the year. The failure also affects Ionis Pharmaceuticals (NASDAQ:IONS), which licensed pelacarsen to Novartis in 2019. Citi analyst Eric Joseph expects less than a 5% immediate downside and notes that the result should not impact Ionis' fiscal 2026 guidance, characterizing it as primarily a clearing event.
Topics: clinical trial failure investment thesis pipeline momentum